Archive for Saturday, October 8, 2011

Reducing poverty should be top priority

October 8, 2011

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With each passing month, the unemployment lines swell with downtrodden members of America’s middle class, once the strength of our nation. Without an infusion of jobs, their plight will continue to grow. And that spells even more poverty among the disadvantaged. All the while, Congress continues to posture, in hopes of gaining political clout and eventual re-election. Any mention of poverty and the emerging threat to our social structure is met with spurious charges of “class warfare.”  

Into this maelstrom fell two news stories—one from July and another in September—that did not receive the massive attention they deserved. If we continue to ignore their message, we will continue to put our societal stability and fundamental values in jeopardy.

The July news, from the Pew Research Center, tells us that the median wealth (including real estate) of white households is 20 times greater than black households and 18 time greater than Hispanic households.  More specifically, the typical white household has $113,149 in wealth, the black household $5,677 and the Hispanic household $6,325.  About a third of black families have zero or negative wealth.  The number is 31 percent for Hispanics and 15 percent for whites.

Here’s the kicker: These ratios are about twice the size they were two decades ago. 

The September news, from the U.S. Census Bureau, tells us that 15.1 percent of Americans live below the poverty line — $22,314 a year for a family of four and $11,139 for an individual. That’s up from 14.3 percent in 2009. This means that 46.2 million Americans live in poverty, 2.6 million more than in 2009. We now have the largest poverty percentage of any developed country.  If that’s not enough to break your heart, consider this: 22 percent of children under the age of 18 now live in poverty, up from 17 percent in 2000.

And here’s the kicker on this one: This is the largest number of Americans living in poverty since the development of the measure in 1959.

These statistics, and the stories behind them, are grim warnings to a society where the social fabric is being stretched to its breaking point. Add to this the constant news about the mega-wealthy, their salaries and lifestyles, and the perception of a government that favors the rich and influential, and you have a toxic mixture, the kind that recently exploded into days of rioting in British cities.

It would be too easy and unfair to blame this situation on one political party.  The issues of race and poverty have been with us since our nation’s inception. But unlike past years, the problems are getting worse.  No happy ending is in sight and the promise of a better tomorrow for these millions is quickly disappearing.  And as their hopes fade, so do those of the nation – along with our stability and our ideals.

We need to let the people in power know that this is simply unacceptable — that Americans will not give our support to anyone who will not devote their time, energy and resources to the eradication of poverty.  Among the many issues we face, this truly can be listed as a priority.

Gene Budig was president/chancellor of three major state universities, including Kansas University and past president of Major League Baseball’s American League. Alan Heaps is a vice president of the College Board in New York City.

Comments

Flap Doodle 3 years, 8 months ago

Hopenchange is working exactly as designed.

Getaroom 3 years, 8 months ago

And you have offered what in exchange? Nothing as usual.

Satirical 3 years, 8 months ago

You reduce poverty by creating good paying jobs.

Obama tried the "Trickle-Up" theory when he gave out stimulus checks a few years back. It failed to stimulate the economy because poor people don't create jobs, businesses do. But confronted with this fact, my guess is that you will respond with the a typical liberal solution whenever a liberal program fails -- We need to throw even more money at the problem until we are completely sure it will fail.

Throwing money at problems never has and never will will solve most of society's major issues.

just_another_bozo_on_this_bus 3 years, 8 months ago

Businesses only create jobs when there are customers with money who are willing to buy their goods and services. Therefore, getting money into the hands of people who will spend it most certainly can create jobs.

Satirical 3 years, 8 months ago

But if that demand is for Chinese goods, then how does that help create American jobs? I could argue economic theory with you all day, but history is the best teacher. If your theory were true the the stimulus would have, as Obama predicted, prevent unemployment from reaching 9 percent.

ivalueamerica 3 years, 8 months ago

The stimulus was introduced by and passed under the Bush administration.

Satirical 3 years, 8 months ago

Thanks for catching my error. I meant to say the stimulus rebates.

beatrice 3 years, 8 months ago

"People don't create jobs..."

As we learned recently, "Corporations are people."

Thus, corporations don't create jobs. No wonder unemployment is so high, nobody is creating jobs.

Actually, demand creates jobs.

Crazy_Larry 3 years, 8 months ago

"Throwing money at problems never has and never will will solve most of society's major issues." Should have told BushCo. and Hank Paulson that right before he gave $800-billion to the Too Big To Fail Wall Street Crowd back in 2008... Wait a minute...Hank Paulson was a banker! He worked for Goldman Sachs since 1974! The corruption is right in front of your eyes if anyone cares to look. But, you'd rather get sucked into they're game. Divide and conquer. Bread and circuses. Weapons of mass distraction.

Crazy_Larry 3 years, 8 months ago

Failed to stimulate the economy? Hello! Can you explain this? March 2, 2009 Dow Jones Ave closes at 6627 ====stimulus, stimulus=========>> April 25, 2011 Dow Jone Ave closes at 12810. I think you've been listening to too much Fox News or something.

Fossick 3 years, 8 months ago

"All the while, Congress continues to posture, in hopes of gaining political clout and eventual re-election. "

It ought to be obvious by now that Congress is powerless to do very much about the situation. The Fed is as well. While both are surely posturing, a lack thereof would not change the problem, because posturing is not the problem.

If they were able to solve it, why have they not already? From lack of effort? Hardly. Obama'a first stimulus was not the first stimulus, Bush passed one and maybe two (depending on how you count them). Then there was TARP and bailouts and the nationalization of Freddie and Fannie and AIG. The Fed has issued quarterly programs for the past three years, driving interest rates to historic lows, expanding their balance sheet by hundreds of percent, buying this and selling that. Now another stimulus is just what we need?

If you go back and read the financial press over the past four years, you'll see that each of these programs was designed to do precisely what they have not done*. A reasonable person might thereby conclude that low interest rates and more deficit spending are not the solution. But when the only tool you have is a hammer, every problem looks like a nail.

  • With the exception of TARP, which did never even attempted to do what it was designed to do, buy bad assets from banks. Instead, it was used as a slush fund for the Paulson Treasury Department.

just_another_bozo_on_this_bus 3 years, 8 months ago

Stimulus spending that's directed primarily towards the professional money shufflers (who primarily shuffle it into their own pockets) will always fail to do anything but redistribute more wealth to the already wealthy.

Fossick 3 years, 8 months ago

Without a doubt. And yet that's not what the stimuli have all been:

"The [first Bush stimulus] will pay $600 to most individual taxpayers and $1,200 to married taxpayers filing joint returns, so long as they are below income caps of $75,000 for individuals and $150,000 for couples. There is also a $300 per child tax credit." It also included additional "payments to disabled veterans and some senior citizens." http://articles.cnn.com/2008-02-13/politics/bush.stimulus_1_rebate-checks-economic-stimulus-act-stimulus-bill

The bill was, of course, designed to increase spending, which would theoretically avoid recession. I might note that it didn't.

Unfortunately, the only good the bill could have done was the thing that economists most feared: that individuals might use the windfall to reduce their personal debt. And even in that case, the debt was simply transferred from household balance sheets to the national one. The banks, you will surely note, get paid their interest in either case.

One could obviously argue that the payments were too small, but that is a bit of after-the-fact rationalization, like saying that the reason the Chiefs stink is because they are only allowed 11 men on the field at a time. Were they allowed 27, surely they would score more touchdowns.

But I was incorrect in saying that "when the only tool you have is a hammer, every problem looks like a nail." The truth is that when the only tool you have is a credit card, every problem looks like a clearance sale.

jafs 3 years, 8 months ago

It might be a good idea to ask why the disparity is so great, and why it's increasing.

jafs 3 years, 8 months ago

Is that a real question?

If so, things like slavery and the ongoing denial of equal rights to black people until the 1960's might have something to do with it.

That's right, of course, once you have a certain amount of money, it's pretty easy to get more. The difficulty is in getting that amount of money in the first place.

jafs 3 years, 8 months ago

Once you have a certain amount of money, you can live quite comfortably on investment income from very low risk investments like bonds.

Fossick 3 years, 8 months ago

"If so, things like slavery and the ongoing denial of equal rights to black people until the 1960's might have something to do with it."

They might, or not, since as Budig says, "[t]hese ratios are about twice the size they were two decades ago."

Are black people twice as oppressed today as they were in the 80s and 90s? If not, we're going to have to look for a better answer.

So what has changed in the past 20 or 30 years? Tons of stuff, of course, and too much of it is cultural. If you adjust racial numbers for age, marital status, and education, you will find some difference, though not 20x or even 10x. In this you will certainly find holdover effects from segregation.

But if you look at the makeup of the "median" white household and the "median" black one, you will find some structural differences that might explain why black households do not tend to accumulate wealth.

Hispanic households are a different story, and might be better compared to Italian ones in the 1880s or Irish ones in the 1840s or even Vietnamese ones in the 1980s, for obvious reasons.

jafs 3 years, 8 months ago

The only way you can conclude they have nothing to do with it is if you assume that the actions of black people from the 1960's onward have nothing at all to do with the history of black people in America. So, one would be arguing that the experiences of blacks in America for about the first 200 years of their existence here has no effect on black culture the moment that the Civil Rights Act is passed, and for the next 40 years.

That seems rather silly to me, and not likely.

Also, of course, even today there is unequal treatment - blacks are incarcerated at higher rates than is warranted by the criminal percentages. Especially with drug-related offenses.

Fossick 3 years, 8 months ago

"The only way you can conclude they have nothing to do with it..."

It's a good thing I didn't conclude that.

So what about slavery and segregation caused a doubling of the black/white wealth disparity since 1991?

jafs 3 years, 8 months ago

I don't think there's an easy, or simple answer to that question, or even that it's posed well, since it ignores the ongoing inequalities black people face.

But, I do think that if I were black, the fact that my people had been enslaved and mistreated for 200 years would affect me deeply for quite a while after that had stopped happening.

I imagine there are numerous studies about black culture that show those sorts of effects - don't you?

Fossick 3 years, 8 months ago

"I imagine there are numerous studies"

Absolutely. I suspect Moynihan's is still the best, if only because it was about the last time one publicly could tell the whole truth in these matters. Once a trend is set in motion as it was with urbanization and feminine household leadership, it's easier to go along than to overcome. And both of those trends have their basis in slavery and segregation.

But I posed the question as I did for a reason - to illustrate that it's too easy to blame today on the yesterday of 50 or 150 years ago rather than the yesterday that actually happened yesterday. People's history affects them, but it does not control them. To blame the past is to excuse those in the present, and this simply cannot be done.

I was struck by this literally yesterday when talking talking with a black classmate of mine - we are in a graduate-level Holocaust class together*. He was an army brat raised in Germany, and we were discussing the news that Germany is re-opening hundreds of Nazi war crimes cases and racing against the clock to get these guys prosecuted before they die of old age.

"The people who are calling for these tribunals have got to get past this," he said. "It's not good for them and not healthy to be so bound by the past that it eats you, that it becomes you." Of course, WWII is about half the way back to slavery, and his words apply double there.

Yes, black people got a @#$%ty deal for most of American history. But like Jews in Germany, the only way for blacks to go forward is to stop looking back. Blaming the past is not going to change anything. The past can excuse anything. Perhaps it can even explain anything. But it cannot fix anything.

  • He's almost as old as me, fluent in German, and left-wing as all get-out. I love the guy.

jafs 3 years, 8 months ago

That's fascinating. I'll bet he's not Jewish.

It's not about "blame" for me - it's about understanding, and compassion.

Fixing the situation includes doing something as a society to help the folks who have been negatively, and deeply impacted by the injustices of the past.

As a Jew, the fact that they tried to wipe out my people affects me deeply in a way that non-Jews may not be able to understand completely.

I bet it's similar for black folks.

I don't mean to "excuse" anything - black people, like any of us, are able to make bad decisions and act badly, and the best advice I have for them (and everybody else, for that matter) is to make the best choices you can, and act as well as you can, regardless of the circumstances.

just_another_bozo_on_this_bus 3 years, 8 months ago

Wow, that was one of the shortest dissertations of willful ignorance I've ever seen. Well done.

George Lippencott 3 years, 8 months ago

Another clarion call for more resources for the “poor”. The poverty rate has increased by 2% in the middle of the worst recession in decades. Wow. One would think it would be worse when in fact it seems to be stuck at around 15% of the population year after year.

Perhaps the social safety net is working as designed. The 50% of us who pay federal income taxes contribute somewhere between $18,000 and $25, 000 per poor person in various federal programs. State and local programs add more. Close to another Trillion or so is provided through faith based efforts. The approved definition of poverty for a family of four is slightly over $22,000 per year. A goodly portion of these resources available through the social safety net are not counted as income in calculating the number of poor.

By my math this data would suggest that our social safety net has done as expected – essentially eliminated poverty. So why the call for more? Yes, I am sure we can find the 1% who through their own ignorance or just bad luck have fallen through the crack just as we can find the millionaire who through the perversities of the tax code has such an income during one year in a 50 year employment lifetime.

Perhaps this call is more related to wealth redistribution than fighting poverty. With just a little more work we can collapse the middle class to a common standard of living. And then there will be the elites who are too important to our society to tax and who will live much better than the 99%. Are we really buying into this?

It is past time to reexamine how we define poverty and how we are spending such substantial resources without apparently having any effect on it! What is that current simplistic definition of mental illness – repeating the same action over and over and expecting a different outcome.

George Lippencott 3 years, 8 months ago

The robot builders and designers.

Maybe we can get to those replicators on the Enterprise - no need for money

voevoda 3 years, 8 months ago

Many people who live in cohesive families, who are responsible and self-reliant and charitable and god-fearing, have also seen their household slide into desperate financial straits. What caused the decline? A catastrophic illness, often. Loss of the chief breadwinner's job amidst a tight labor market, often. Reemployment at minimum wage without benefits, often. Please, BornAgainAmerican, take guidance from Jesus Christ, who did not berate poor people for making bad choices or refuse them help because of it.

Satirical 3 years, 8 months ago

The minimum wage and illegal immigration is a large reason why this disparity exists. Both negatively impact minorities and low skilled workers.

Fossick 3 years, 8 months ago

"Both negatively impact minorities and low skilled workers. "

While they do negatively impact some, they are not the largest problems.

"Minorities' includes more than just blacks. Every illegal immigrant family here, while probably making less than the median white income, is in a better position for being here than not*. It's hard to argue that illegal immigration negatively impacts them. Illegal immigration does impact the wealth disparity - how could the addition of 10 million penniless people, concentrated within a given ethnic group, not change the wealth ratio of that group to others?

"Median income" is an unfair measurement to use in this manner for a couple of reasons, the most important being that there exists a difference between black and white family structures and between difference in ages. White households tend to have fewer kids and to be older than black ones. White households have a higher percentage of 2-income, married couples than black ones. Both of these make a huge difference in household wealth accumulation, especially over time. Younger people tend to own less if for no other reason than that they have worked fewer years.

If you were to compare the wealth of the median, 25-year-old single white woman with three kids with that of her black counterpart, the differences would not be that big - neither is likely to have many assets. But median above (which is not the same as average) is comparing a population which is made up of mostly intact nuclear families with one that is not. The differences can be explained substantially by those variables.

But the fact that those variables are not discussed is, I fear, purposeful. It is a classic "World Ends! Women and Children Hardest Hit!**" approach. The numbers presented are the ones that look worst - they even look worse than they are. The fact is that more than 9 in 10 people who want jobs have one. Lots of people have more than one. It's not the end of the middle class. It's not even the beginning of the end. To stand Churchill on his head, it's not even the end of the beginning.

  • Which is why they are here. ** or "DA stops prosecuting misdemeanors, women hardest hit by abusive boyfriends."

btsflk 3 years, 8 months ago

I'm not sure that letting the people in power know the current situation is unacceptable makes any difference They ARE the megawealthy, rich and influential. They live in a bubble of unreality funded by us, and their corporate handlers. One of our senators recently informed me that Kansans do not have the luxury of not cutting back their budgets. I then inquired how he, as a Kansan, had cut back on his budget. No reply, yet.

Our household, once a little higher on the scale, is now at poverty level. It's unfortunate that some want to brand us as looking for a handout. That's just not true. Those I know in this postion are constantly trying for a better job. We are hardworking, dependable and honest, we just want a chance.

Parks and other areas across the country are filling with people trying to make their voices heard, to penetrate the bubble surrounding our leaders.

Flap Doodle 3 years, 8 months ago

What would I do differently? I'd quit throwing hundreds of millions of tax dollars to wild schemes backed by people who have donated a lot of money to political parties. I'd quit spending money to illegally send firearms into Mexico to arm the drug cartels. That's just two of first day's tasks.

Crazy_Larry 3 years, 8 months ago

You can't stop throwing money at Wall Street. They can, and will, crash the economic system if you quit supporting them.

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